A bill that would impose a statewide fee on plastic and paper checkout bags, with a large portion of revenue going toward watershed protection, is still alive at the Legislature — but support among lawmakers is waning as Honolulu gets closer to passing a similar bill.

Honolulu is the state’s only county that has not enacted an ordinance to discourage disposable bag use. State law would not pre-empt county ordinances that prohibit or restrict single-use checkout bags.

Under the state bill, consumers would pay 10 cents per bag, with a portion of the proceeds going to the retailer and the state Department of Health to administer the program. Honolulu’s bill proposes a 3-cent fee per bag (later increased to 5 cents) to be borne by the merchant, leading to an outright ban in the future on nonbiodegradable plastic bags.

While the business and environmental communities have supported the state approach, retailers testified against the Honolulu bill on Wednesday during a City Council committee meeting because it would ultimately ban nonbiodegradable plastic bags and does not address consumers’ use of paper bags.

Since neighbor island counties have enacted bans on plastic checkout bags, merchants have told state lawmakers that consumers have switched to paper bags, which cost retailers substantially more.

"All the bans on the neighbor islands have just been on plastic, and if you heard the testimony, we heard from a couple of vendors on the neighbor islands where it was costing an additional $30,000 a month to pay for the paper. … And that’s why this particular bill addresses that," said Sen. Mike Gabbard (D, Waikele-Ko Olina), a supporter of the bag fee bills.

On Tuesday, the Senate Energy and Environment and the Ways and Means committees opted to "gut and replace" House Bill 2483 (originally written to amend the state planning act) to resurrect the bag-fee bill after it became clear that the House Finance Committee would not hear the Senate bill. The action means that the bag fee could come up in conference committee between the House and Senate.

The Tax Foundation of Hawaii testified during that hearing that the state’s bill is a "money grab" to fund state projects.

"The Honolulu county council is in the midst of considering such a ban and if that’s the case, then there is absolutely no reason for this legislation," said Lowell Kalapa, president of the foundation.

Gov. Neil Abercrombie announced in his State of the State address on Jan. 23 that watershed protection is one of his administration’s top priorities. Lawmakers have included some money for watershed protection in the state budget and in other bills that remain alive.

Gabbard said the bill is not a "money grab" and that it is better than other watershed funding bills because it is not a one-time sum and would instead provide a dedicated revenue source that doesn’t take from the general fund.

He acknowledged that the revenue would decline over time as people decrease their bag consumption and said legislators could look at using general funds in the future.

"But let’s not do it right off the bat; let’s just give this a try," Gabbard said. "We’re hopeful, and I’m hopeful the House is going to come to the table so we can talk story about this bill" in conference committee.